A group of minority shareholders of Dish TV has sent a notice to call an Extraordinary General meeting (EGM) of the direct-to-home service provider, raising concerns over corporate governance issues, seeking reconstitution of the board, and removal of two independent directors questioning their independence.

In a letter to the company’s board of directors, 77 Dish TV shareholders—representing a 10.15 percent shareholding—proposed the appointment of K Badri Narayanan, Satis Kumar Yanmandra, and Jeet Sen Gupta as independent directors.

Additionally, it has asked for the dismissal of two independent directors from the company’s board of directors, Shankar and Rashmi Aggarwal, PTI reported from New Delhi.

The shareholders stated in the notice that “the current independent directors have a long-standing relationship with Dish TV and the Essel group, which raises questions about their independence.”

Dish TV is caught up in a power struggle over board participation between its major shareholder, Yes Bank Ltd (YBL), and the promoter family, which includes its previous chairman Jawahar Lal Goel. Due to the disagreement, the company’s former promoter-supported chairman Jawahar Lal Goel has left the organization, which is unable to pass its annual statements from the previous two years.

Dish TV informed the stock markets about the event and stated that it is now reviewing the statement from the minority shareholders.

“… will take necessary steps as per applicable law and procedures,” said Dish TV in a regulatory filing.

Besides, the minority shareholders have also raised several other issues questioning the investments made by the company such as in its OTT platform Watcho.

“Dish TV made a significant investment of Rs 1,218 crore (which is 20 percent of the total netblock of the fixed assets, intangibles, investments, and capital WIP of Rs 6,012 crore) in the FY20 (Intangible Assets), for Watcho, its flagship OTT platform,” they said.

The investments were qualified in FY2020 (the year of the investment itself) and FY2021.“Upon lenders and investors questioning the investments, the company had made an impairment of Rs 203 crore in FY2022,” it said.During FY20, the Essel group companies defaulted with multiple lenders, including bank loans to Essel group companies secured by the pledge of Dish TV Shares, they said.

“It is our apprehension, that anticipating a loss of majority shareholding due, to the invocation of pledged Dish TV shares from the bank and other lenders, the aforesaid funds may have been diverted by the promoters for other purposes,” the letter said.

On the removal of the two existing independent directors, the minority shareholders said, “They have a long-term association with Dish TV and Essel group which cast doubt over their independence.”

Rashmi Aggarwal held directorship in other Essel group entities — Dish Infra, Zee Media, and Essel Forex — till Feb 2019, while Shankar Agganval held directorship in Essel Infraprojects Ltd till November 2018.

Essel Infraprojects is a defaulter entity with YES Bank and several other lenders and his association is a “red flag”, the notice added.

Besides, they have also raised other corporate governance issues and alleged that the board is not acting in line with good corporate governance standards.

It does not have a “fair representation” of the incumbent significant shareholders of banks and financial institutions holding 45 percent shareholding in the company.

“The board is purportedly acting at the behest of certain minority shareholders holding merely 4 percent of the shares in the company,” they alleged.

Moreover, they also raised concerns over the continuation of Jawahar Lal Goel as additional director after a proposal for his re-appointment as MD was rejected by the shareholders.

“It was only after the intervention of the shareholders that he subsequently resigned as additional director,” they said.

In December last year, shareholders of Dish TV again rejected the proposal for the adoption of audited standalone and consolidated financial statements for FY21 and FY22 in the AGM.

Earlier, the shareholders of the Direct-to-Home service provider had rejected the proposals to approve the balance sheet of the company for the last two fiscals in the 34th AGM conducted on September 26, 2022.

In June 2022, shareholders in an extraordinary general meeting rejected the proposal for the reappointment of Goel as its managing director.

In September, shareholders of Dish TV rejected four resolutions in the AGM, including the adoption of the company’s financial statements for FY21 and FY22, and the appointment of independent director Rakesh Mohan.

Dish TV shareholders, on December 30, 2021, also rejected all three proposals, including the adoption of financial statements and the reappointment of Ashok Mathai Kurien as director.